EP 101: Reinvigorate American Capitalism Through Crowdfunding with Mark Roderick
In this episode, we dive into the world of crowdfunding and see how it can reinvigorate American Capitalism with our special guest Mark Roderick. Crowdfunding is an exciting and transformative concept that simplifies capital formation through the Internet. Mark, a corporate lawyer with extensive experience in helping entrepreneurs raise capital, shares his insights on how crowdfunding has the potential to revolutionize investment opportunities.
With the internet expanding opportunities in raising capital, similar to how it revolutionized the retail and dating industries, Mark explains how crowdfunding can connect entrepreneurs with investors in unprecedented ways. Specifically, he delves into the Jobs Act of 2012, which created different types of crowdfunding, including the highly successful Rule 506 C that allowed real estate professionals to advertise and raise billions of dollars. With Mark's guidance, we also explore the three essential documents in real estate deals that are vital for legality and protection against potential challenges. Join us for this enlightening episode as we uncover the power and potential of crowdfunding with the knowledgeable and experienced Mark Roderick.
💥💥 Remember, this is your MBA. Have a notepad handy, and get ready to take some 📝 notes!
Key Points from This Episode:
Crowdfunding has the potential to revolutionize real estate investment opportunities.
The Internet greatly expands opportunities for raising capital and connecting with investors, similar to how it has revolutionized retail and other industries.
Mark has extensive experience in helping entrepreneurs and real estate professionals raise capital.
Mark is knowledgeable and experienced in navigating the complexities of crowdfunding laws and helping real estate professionals comply with new regulations.
The Jobs Act of 2012 created three types of crowdfunding, including the most successful one, which was a change in the previous rule that prohibited the advertising of real estate syndications.
Rule 506 C allows for advertising and requires verification of accreditation for investors.
This change enabled real estate professionals to raise billions of dollars of capital, making it a spectacularly successful source of funding.
As a corporate lawyer, Mark can provide legally sound and easily understandable documents to ensure compliance and avoid legal troubles in the crowdfunding process.
While Mark can assist with legal aspects, he is not able to directly help with raising funds. Established real estate crowdfunding sites like RealCrowd or CrowdStreet may be a viable option for experienced individuals to access an existing investor base.
For those starting out, crowdfunding requires active digital marketing efforts. Simply creating a website is not enough to attract investors; it is a marketing business that requires proactive efforts to generate interest and secure investments.
Three essential documents in real estate deals – the subscription agreement, limited liability company agreement, and the disclosure document (PPM) – play a vital role in keeping the process legal and protecting against potential legal challenges.
Crowdfunding thrives in spaces where limited information is available and can make deals more efficient and known to a broader audience.
Crowdfunding is not well-suited for fully efficient markets like single-family home mortgage loans or large-scale development projects where most major investors have access to in-depth information about the deal.
Tweetables:
“Capital is the lifeblood of our economy.” –Mark Roderick
“What the Internet does is it just so vastly increases your opportunities. On the investment side, you can use it in crowdfunding to immediately connect, literally, with every prospective investor in the world.” –Mark Roderick
“Crowdfunding is a marketing business. It's not a ‘Build it and they will come.’ You need to advertise.” –Mark Roderick
Resources
About Mark Roderick
Since the JOBS Act of 2012, Mark Roderick has spent all of his time in the Crowdfunding space, and today he is one of the leading Crowdfunding and Fintech lawyers in the United States. He writes a widely-read blog, which offers a wealth of legal and practical information for portals and issuers. He also speaks at Crowdfunding events across the country and represents industry participants across the country and around the world.
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